de Oliveira, Luis Felipe Batista Soares, Sergei S. D.
Year of Publication:
Texto para Discussão, Instituto de Pesquisa Econômica Aplicada (IPEA) 1738
Arguments against means-tested cash transfers for the poor based upon labor supply appear both in the specialized literature and in the media. It is possible to make a microeconomic argument pointing to a reduction in labor supply on the part of beneficiaries of a targeted cash transfer. This would lead people giving up looking for a job, with long-term consequences for their human capital and social networks. This text reviews (we hope) all the studies made on this issue in Brazil since Cash Transfers have become important. The results are clear: with the exception of specific demographic groups such as women with children, either there are no labor disincentive effects at all or they are very small.
conditional cash transfers labor supply labor incentives time allocation